A-Wear goes back to examinership

Irish fashion label A-Wear has entered interim examinership in an attempt to force its landlords to reduce rents at its more than 30 stores around the country. This is the second time that the fashion chain calls the administrators

in less than two years.

The chain has gone through a rocky period since late 2011, it was bought by Hilco, the turnaround specialist that rescued HMV. Barely four months later though, Hilco sold it to the Lebanese-Canadian Jesta retailing group.

Tuesday, the High Court judge Peter Charleton appointed insolvency practitioner Ken Fennell as interim examiner to Latzur, trading as A-Wear, reported the ‘Irish Times’. According to the paper, the judge in the examinership hearing noted an independent accountant had formed the opinion the company had a reasonable prospect of survival if certain steps were taken.

Bernard Dunleavy spoke on behalf of the retailer, saying it has traded for many years and was purchased by its current owners from receivers in 2012. While the new owners had halved the label’s annual loses from 5 million to 2.5 million euros, there is little more they can do regarding to a number of issues.

Rents “a significant problem”

High rents were “a significant problem” for the company with rent at its Grafton Street store in central Dublin accounting for 28 percent of its revenues, counsel said. Rent accounted for more than 15 percent of revenues at 17 other stores and that was “much too high”, counsel said.

On the upside, Dunleavy said the firm’s wholesale business and internet sales were profitable and that they intend to expand this part of its business in conjunction with European partners if the examinership proves successful, counsel added. Also, he said the appointment would allow negotiations on rent agreements and ensure vouchers would be honoured.

Mr Justice Charleton said there were “strong reasons” why an examiner should be appointed. The matter was adjourned to a date later this month.